“The Baby Boomer Dilemma” Documentary Exposes America’s Failed Retirement Experiment

At long last, a full-length documentary film focused upon the greatest financial challenge facing our aging Baby Boomer population today, as well as younger workers: How to fund a secure retirement that may span decades. For some, retirement may last longer than their working years.

The Baby Boomer Dilemma, An Expose of American’s Retirement Experiment (PG rated) was released late last year and is currently playing in hundreds of US theaters. The producers of the film are also counting on financial advisers to host licensed free showings of the film in communities across the nation to Boomers for financial literacy purposes.

Doug Orchard, the film’s director, recently told me, “I made this movie because I was deeply concerned my own father—a retired CalPERS participant also collecting Social Security—had no idea what’s coming and needed to be prepared. The truth of the matter is that the retirement benefits he and his generation were promised may prove to be in jeopardy. Our retirement system is deeply flawed and unless the systemic problems are exposed, retirement savers cannot possibly make the right decisions to protect themselves.”

True, some might say this film is twenty years late for Boomers who started working in the 1970s or 1980s and are nearly, or already, retired. But planning for retirement is even more daunting for younger workers. Today—after 40-plus years of dismal 401k results—there is broad consensus these defined contribution plans are so structurally flawed that they will never provide the level of retirement income offered by pensions (even if you select all the best options from the investment menu offered by your employer). Putting the burden of retirement planning on the person who knows the least—the worker—has proven disastrous.

Private defined benefit pensions, on the other hand, have all but disappeared and, worse still, the federal agency responsible for back-stopping failed corporates—Pension Benefit Guaranty Corporation—is itself $50 billion-plus underfunded after decades of irresponsible management.

Finally, as I discuss in the film and detail in Who Stole My Pension? state and local pensions not only lack effective federal or state oversight, they are also grossly mismanaged. As I explain in my book, Wall Street has conspired with public pensions to eviscerate public records laws and loot, in secret, government plans. Over the past 15 years, Wall Street has pulled off the largest wealth transfer in history—trillions from government workers’ retirement accounts have been swept into the pockets of Wall Street billionaires.

This film features some of the nation’s top economic minds on retirement income including Robert C. Merton, Ph.D. (MIT & Nobel Prize winner 1997), William F. Sharpe, Ph.D. (Stanford & Nobel Prize winner 1990), Olivia S. Mitchell, Ph.D. (Wharton & Executive Director of the Pension Research Council), Bridget C. Madrian, Ph.D. (Dean, Marriott School of Management at BYU & former Professor at Harvard & Chicago), David F. Babbel, Ph.D. (Wharton & former Professor at Berkley & a division founder at Goldman Sachs), and Moshe A. Milevsky, Ph.D. (York University, Toronto). Also featured are government leaders and experts.

While the film concludes that annuities offer the best opportunity for stable retirement income, it is a bit surprising when the renowned experts say they do not understand why these financial products have such a bad reputation. Fixed and variable annuity investment and sales practices have long been notoriously unsavory. As I say in How To Steal A Lot of Money—Legally:

“Perhaps the best-known example of a terrible investment product that pays outrageous commissions to salesmen and sells like hotcakes is the variable annuity… These costly products are sold, not bought. That is, highly incentivized salesmen push variable annuities on investors who don’t have a clue about the fees and expenses they are paying. No puchaser of a variable annuity has ever understood these investments. If investors understood, they’d never buy this sh*t.”

Putting aside variable annuities—which I don’t think anyone should ever buy—I think the film makes an excellent case for including low-cost fixed annuities in your retirement planning for stable income. But be cautious: all annuities are complex products. Hopefully, the industry will work to offer lower-cost, more transparent and straight-forward retirement income alternatives.